An employer and the union representing its workers need to work together most of the time but every couple of years when the contract expires they can be at loggerheads. Negotiations are usually contentious and sometimes the folks at the table are loud and abusive.  But not always–sometimes negotiators can disagree without being disagreeable.

Bill Klinger was one of those union negotiators who could effectively get his points across while always retaining his polite demeanor and good sense of humor.   The American Federation of Musicians Local 369 lost a giant when Bill passed away earlier today.

Bill and I negotiated several contracts together.  Yes he was always on the other side but  I always enjoyed my time with him.  Parrying with Bill was risky–he possessed a quick and sharp wit–I rarely matched him.

He and AFM Local 369 represented the musicians of the Las Vegas Philharmonic in contract negotiations.  I can only imagine the challenges facing a union negotiator but I am certain that trying to reconcile the sometimes divergent views of 70 or so passionate professional musicians takes some real patience and skill.

I knew that Bill had good credentials but was not aware of how impressive his background was until I read his bio on the AFM website today.  A graduate of the Juilliard School of Music, a member of the Miami Symphony and eventually a  professor at University of Miami, Bill played with the most famous conductors, instrumentalists and opera stars the world over.  There’s much more–read the entire bio here.

While doing all that he also found time to begin representing his AFM local in Miami in contract negotiations.  When I started working with him a few years ago he had a few more years of negotiating experience than I did–he started negotiating for the Miami Symphony when I was about five years old.

We all lost a good soul today, we hope Bill rests in peace and we offer our sincere condolences to his loving wife Maxine.

A new lawsuit recently filed by a local union might be overlooked as just another dispute over money.  But what makes the case noteworthy is the fact that unions rarely air their dirty laundry in public–especially when it involves the alleged misappropriation of the union’s money.

The Service Employees International Union (SEIU) Local 1107 represents a number of Clark County employees including those working at UMC, the RTC and the LVCVA.  Local 1107 sued its former President, Chief of Staff and Financial Officer for the alleged conversion and misuse of over $47,000 in union funds.  The union also seeks punitive damages in excess of $140,000.00.  You can read the lawsuit here.

It’s pretty serious stuff for a union to sue one of its union “brothers” or “sisters” just because they allegedly compensated themselves too well.  Wouldn’t it have been easier and less embarrassing to just sweep it under the rug—especially when this particular union took in nearly $5 million in dues last year and on December 31, 2013 had nearly $300,000 in cash on hand?

Well, either the current leadership of the union was intent on doing the right thing or perhaps the union felt it had to go after the money because its finances are subject to public scrutiny.  SEIU Local 1107 is one of the few public employee unions that also represents employees in the private sector—notably most of the large for-profit hospitals in town.  Because it represents private sector employees a federal law, the Labor Management Reporting and Disclosure Act (LMRDA), regulates it.

Congress believed unions needed regulation for a very good reason. “Like any functioning organization, a union must make financial decisions on a constant basis. The ability of the union to perform its representational functions depends on the availability of sufficient financial resources. Also, like any other institution, concentration of authority over the management of money entails the risk that authority will be abused. Unlike their commercial counterparts, unions do not have a tradition of hiring financial experts to manage their affairs. Workers who have had no financial training before their election to union office become, upon election, responsible for managing funds and property in amounts beyond their experience. As one court has acknowledged, union officials ‘are neither accountants nor controllers: Their positions as union leaders demonstrate their organizational rather than financial expertise.’”  Labor Union Law and Regulation (2003),William W. Osborne, Jr.(Editor).

 

That is why in 1959 Congress passed the LMRDA, which imposed, among other things, an obligation on unions who represent employees in the private sector to file annual financial reports with the federal government. You can see SEIU Local 1107’s most recent report here.  The federal government does not have the ability to regulate unions that only represent public employees.  Regulation of public employee unions are left to the states.

So therefore, what do the hundreds of members of other Nevada public employee unions know about where their dues money goes?  Nothing.

There are some small pockets of Nevada public employees who are represented by unions subject to the LMRDA, for example: Teamsters (Local 14 in Las Vegas and Local 533 in the North), International Union of Operating Engineers (IUOE Local 501 in Las Vegas and IUOE Local 39 in the North) and of course the International Union of Elevator Constructors Local 18. But the vast majority of Nevada public employees (and the Nevada taxpayers in general) are entitled to no information whatsoever on the how the unions handle their money.  Keep in mind that the large police and fire unions handle massive amounts of dues money and some own substantial buildings and land.

To uncover how a Clark County teachers’ union chief got paid  $632,000 in compensation in one year a lot of digging was necessary—read about it here.  In the rare case there may be a press report on some internal financial impropriety like this: “Case against ex-head of police managers union closed quietly”.   You can tell by the headline itself that the union wanted the public (and maybe the members) to know nothing.  That story was reported by Jane Ann Morrison.  Sadly, Morrison retired this past Labor Day and only a few in the press can dig so well.

Other states have dealt with the problem of invisible union finances by passing a state law similar to the LMRDA.  Alabama, Kansas and South Dakota require public employee unions to file annual financial reports with the state.  Minnesota and New York require the unions to give an annual financial report to their members.  The states use various enforcement tools from barring an offending union from collecting dues to fining the union’s officers.

Shouldn’t Nevada’s public employees have similar protection?  In 2011 Assemblyman Mark Sherwood courageously proposed Assembly Bill 105.  The bill only required the unions to prepare an annual financial report and “make it available for inspection upon request” to any member who paid dues in the prior year.  Of course it would have been better if it required public filing of the report like the LMRDA.  The bill also lacked a good enforcement mechanism.  But at least Mr. Sherwood tried to do something.  Not surprisingly the bill never made it out of committee.

You can expect the unions to complain that finances are an internal matter that does not involve the employer, the taxpayers or the public.  But doesn’t the handling of dues money impact the public?  After all, the local government payroll systems used for dues deduction is owned and operated by the taxpayers.

Also many unions have the right to use local government space for union meetings, and to use local government email systems, or local government wall space for bulletin boards.  Doesn’t that taxpayer provided free stuff permit unions to use dues money for other things?  Shouldn’t unions have to account to the local government how well they are safeguarding and using that dues money?

Plus what about the union business time that many local governments pay for?  Shouldn’t the taxpayers be able to see how the dues money is being spent?  Maybe through better spending habits or by safeguarding against theft there would be plenty of dues money to pay for all of the business that unions do.  Then the taxpayers wouldn’t need to pay any employees for union business time—what a novel concept!

Perhaps in the coming legislature some brave legislator will try again to require some accountability from the public employee unions.

I believe many Roman Catholics in the Las Vegas business community generally support immigration reform in some form.  Many unions support immigration reform too.  However, while some unions spend time and their members’ dues to help immigrants, it is also well known that many unions like to link up with religious groups and use the immigration reform hot button to harass good, ethical businesses whose employees simply do not want a union to represent them.

Whatever the Bishop’s reasons are for his approach to this issue, I support him.  There is no need for the church to step into a dispute, which many times ends up being a union organizing tool, and not just a social/political/legal issue.

The earliest Culinary contract I could find is  a three year agreement from 1961 which is less than 20 pages long—as opposed to the current version which weighs in at nearly 100 pages.

Surprisingly there were nearly 60 different classifications back in 1961 which is not much less than the nearly 89 found in the current agreements.

The job titles certainly reflected what the employment world was like before the discrimination laws.  Apparently if you wanted to plate the food in the kitchen you needed to be a “Dish-up man”.  However ladies who liked working with vegetables were in in luck because that job was listed as “Vegetable Preparation (Man or Woman)”.  Men who were experts at coffee were out of luck when applying for the “Coffee Girl” job.  There were jobs for those who wanted to be a “Grill Man or Woman” but gender seemed to be important for the “Glass Man” or “Silver Man” job.

If you were a Chef, Pastry Chef, Head Butcher, Head Waiter or Head Hostess you could use your bargaining power to negotiate your wage rate with the company—wage rates were listed as “open” in the contract.

If you worked in other jobs your ticket to wealth was getting the highest paid job as a Sous Chef or Night Chef, which paid a hefty $28.60 per day.  The trick was to avoid working a short shift as a bus boy where you earned a paltry $8.15 per day.

Apparently even in 1961 maids were hard to attract and retain.  After three months of employment a maid would receive a 50-cent raise to $13.65 per day.  No other job classification received an automatic raise based on longevity.

Even 50 years ago tips were the name of the game in Vegas.  No doubt in recognition of how the real money was earned the bellmen received one of the lowest daily wage rates of $8.65.

Health insurance was a bargain.  The company paid only $19.00 per month per employee into the trust fund.  It was really a bargain when you consider that for a maid that contribution was equal to about 10% of the wage rate.  As of the 2007 contract the health insurance contribution of $3.44 per hour constituted over 25% of the maid’s wage rate.

There is no mention of a pension in the agreement.

There is not much discussion of discipline or discharge.  No employee could be “fired” or laid off on his day off or while on vacation.  And spineless employers could not have the union do its dirty work: “The Union shall not be held to notify any member of discharge.  That shall be done by the Employer.”  However in those days the union lent a hand in managing attendance issues:  “Any employee who fails to report to work without just cause or who walks off the job during their shift shall be reported to the Union for trial by the Grievance Committee of the Union.”  The contract is silent on whether the trial could result in the death penalty. Apparently what gets buried in the desert stays in the desert.

The contract seemed to support family values. As long as they gave 30 days notice, employees with school age children were to be granted vacation, if eligible, during the school vacation period.  I’d tell you more but it would just cause you to spend hours longing for the good old days.

Oddly the contract does not mention dues deduction.  Nevertheless the union seems to have thrived since then–watch for a future post where we’ll look at the Culinary Union’s financial picture.

Resolution #1:  I Will Self Audit Our Company’s Wage-Hour Practices

According to its strategic plan, the Wage and Hour Division of the US Department of Labor will continue to aggressively pursue employers who:

• Fail to pay overtime where required
• Improperly consider employees to be exempt from overtime
• Misclassify employees as independent contractors

Being snagged on wage-hour violations hurts, not just because it ends up costing money but also because a vigilant company can discover these types of problems fairly easily. Trying to root out harassment or embezzlement can be difficult because those activities are frequently done surreptitiously.  On the other hand, HR and company management can easily find out if there are wage hour problems by looking at payroll records, employee duties and hours worked.  There is little excuse for being surprised by the findings of a DOL audit.

The idea of a self audit is to do what the DOL would do if it showed up for an audit—but do it yourself now while you have time to correct mistakes or reconsider the risky things you have been doing on purpose. Self audits can be done by your employment attorneys. They can also be done in house –we’ve taught lots of clients how.

For a refresher on the Fair Labor Standards Act, read this booklet and this booklet.  For up to date wage-hour information and developments follow the Fisher & Phillips Wage and Hour Law Blog.

Resolution #2:  I Will Review Our Company’s Social Media Policy

Of course you must first be sure that have a social media policy.   No company can afford to be without one. It does not need to be extensive but it must be carefully written because last year the NLRB issued a number of rulings that create a confusing minefield.  Here is a report issued by the NLRB last year, which summarized the cases decided by the NLRB though the first half of 2012.  Note that at the end of the report there is a social media policy that the General Counsel of the NLRB found to be completely legal!  Resist the urge to simply adopt it verbatim—you should still tailor it to your operation and run it past your labor lawyer.

Resolution #3:  I Will Take Steps to Union Proof Our Company

Unless you have been living under a rock you know that the NLRB, packed with union leaning appointees, last year tried to:

•  Force every employer to post a notice informing its employees of the their right to join a union.
• Change the rules so that employers can be ambushed with a union election on 14 days notice.
• Require all employers to publicly thank unions for all they have done for society (OK maybe the NLRB didn’t actually try to do this but you know they really wanted to).

Meanwhile the DOL tried to amend its regulations to require  your labor attorneys to file reports telling the government how much you paid to them for helping keep you union free.

These initiatives did not come to fruition but expect them to be reintroduced this year.

To begin the union proofing process, start by learning the basics about the law of union organizing by reading this booklet on the union organizing aspects of the National Labor Relations Act. Also read this booklet on unfair labor practice liability under the National Labor Relations Act.

Then perform a union vulnerability audit on your own or with the help of your labor attorney. Start by using this tool.   Many of our clients have made changes based on the audit results and those changes have helped insulate companies from union organizing.

Resolution #4:  I Will Schedule Management Training

When times are tough training budgets are one of the first things to go.  Times are still tough but the aggressive government enforcement agenda makes training too important to continue to ignore.  What to cover?  At a minimum you must conduct a refresher on harassment and discrimination prevention.  In the early years such training lasted several hours.  It still warrants time but you can really cover the basics in less than two hours.  Use that extra time to cover union awareness.  That means you educate supervisors and managers about unions and how to spot the early warning signs of union organizing.  That training must also cover “Management 101”.  In that segment supervisors and managers will learn good communication skills and how to properly use progressive discipline.  It should be everyone’s goal after the training to make the workplace so comfortable that your employees would never even consider bringing in a union.  Bonus:  those same management techniques learned in the training will reduce employment claims and make it easier to successfully defend employment claims.  Do the training in house, use your labor attorney, or use some combination of the two.

Resolution #5:  I Will Eat Less Meat and Dairy and More Fruits and Vegetables

Oops, sorry, this one belongs on a different resolution list.  But while we’re on the topic this resolution has nothing to do with animal rights—just living longer and healthier.  Don’t believe me–check out this documentary.

The Real Resolution #5:  I Will Review the Effects of Obamacare on the Company’s Benefit Plans

You will likely need help with this one.  Here is a basic timeline for compliance with the Affordable Care Act.  We’ve walked many clients through the maze.  Using a qualified law firm is best but a consultant can also work well but you must be careful when the consultant you are relying on also sells or brokers insurance products.  The good vendors will remind you, (usually in the fine print) to check with your own benefits attorney.

I hope this list of resolutions is helpful and I would appreciate it if you could post any of your own suggestions in the comments section.

Here is a basic checklist of tasks to accomplish before bargaining begins.  Detailed strategic ideas for use during bargaining will be the subject of other posts.

#1.       Map Out Overall Strategy

You must start out with a plan. The big strategic objectives can be fleshed out before or during a closed session with the elected officials.  Do you need a major reset of wage and benefit levels?  Or are you simply shooting for a one year freeze.

Are there work rules or staffing rules that shackle management? Read and reread NRS 288. 150 paragraphs 3 and 5–are there things you want to do that can fit into the managment rights statute that don’t need to be negotiated?

Think hard about all of these things and come up with an overall plan.  Even if you need a major reset there are two schools of thought:  go for everything you can right now—this economy presents the best climate for local governments to make headway.  On the other hand some folks prefer to avoid a huge battle and chip away at generous contract terms gradually over time.  Local politics, your budget and staff time constraints all weigh into the equation.

How often do you want to meet? Do you expect to end up in fact finding or arbitration and therefore want to get those things scheduled as soon as possible?  Are automatic wage or benefit adjustments looming?  All of these points should be considered.

#2.       Carefully Consider Ground Rules

Ground rules are a tool more often used in public sector bargaining and not used very much in the private sector.  They can play a helpful role in setting up the mechanics/housekeeping parts of the bargaining process and maybe even include a schedule of meetings.  However, ground rules setting up “confidentiality” of negotiations can really hamper the employer’s ability to keep its own employees and the public informed about what is happening, (or not happening) at the bargaining table.  Moreover, ground rules containing union promises to not speak to public officials about bargaining topics are impossible to enforce and there may even be First Amendment arguments unions can make when they get caught.  Here is a basic set of ground rules that should be helpful most situations—be sure to tailor them to your situation.

#3.       Have the Right People at the Table

Who will be the chief negotiator?  There may be a need to bring in outside help to tap expertise or where management simply cannot devote the time necessary.  Sometimes there is a complicated relationship between management and the elected officials and using an outsider to do the bargaining works better.  No matter who the chief negotiator is be sure someone from HR is present at the table as a resource and to take detailed notes.  Having finance and folks from operations on the team, even if just behind the scenes, is critical.  Outside financial experts are widely used by unions.  More local government employers should consider using such an expert—to testify or just for behind the scenes input.

#4.       Prepare Proposals Containing Actual Contract Language

Many employers like to start off by presenting a written list of bullet points at the first meeting.  That is fine to start the discussion of concepts.  But it only works if the union is willing to really talk through the concepts and those talks result in actual draft contract language being prepared, (before impasse)—even if just for further discussion.

Sadly, many times the union just rejects or ignores the bullet points.  Sometimes then the employer just stops there and doesn’t propose actual contract language.  Then when impasse happens the union will argue that the employer cannot offer in fact finding or arbitration a proposal that was not made at the table.  There may be ways around that objection but why put yourself in that position—just get the actual proposed contract language on the table before either party has the right to declare impasse.

#5.       Collect Data To Back Up the Proposals and Present Them with the Proposals

You must proceed into negotiations with the assumption that you will ultimately end up in fact finding or arbitration.  The fact finder or arbitrator will consider three things:  ability to pay, internal equity and external equity.  How much weight will be given to each factor will depend on the circumstances.

I suggest that you collect the relevant backup data when preparing the proposals.  (If you prepared your proposals without doing your homework first you may reconsider some of them when you look at the data.)

It is optimal to present the data collected to the union at the table with the proposal.  The union may look at it and reconsider its position.  Or it may simply fail to refute it—a fact that the fact finder or arbitrator may find significant.  If the union presents data to counter yours for the first time at the hearing the fact finder or arbitrator may well eye it with suspicion.  Bonus: if you have collected this data early you will keep your legal fees down later when your attorneys are preparing for fact finding and arbitration.

Conclusion

You can never prepare too much for negotiations.  Until and unless the legislature makes big changes to NRS 288 the employer will always be behind the eight ball.  Please feel free to make comments with any other ideas that may have worked for you.